Retail Sales Rise, Showing Resilient U.S. Consumers

The rise in sales also partly reflects higher consumer prices, which advanced 0.4% in September from August and 5.4% from a year earlier. The retail sales, which aren’t adjusted for inflation, rose 13.9% in September from a year earlier.

Analysts see signs of resilience from consumers as they head into the fourth quarter.

“We’ve learned to live a bit with the virus,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics. “People still went out to eat at restaurants but they found outdoor seating.”

Excluding auto sales, a sector that has been particularly hard hit by a global shortage of computer chips, retail sales were up 0.8%.

The chip shortage has held down auto production and constrained inventory at dealerships around the country. Car sales fell to an annual rate of 12.6 million in September, down from a recent peak of 18.8 million in April, according to the Commerce Department.

Credit-card spending at restaurants and retailers excluding gasoline stations rose 1.5% between August and September, according to data tracked by the Commerce Department. In particular, spending at restaurants and bars rose 2.3%, the data showed, suggesting that customers didn’t let the Delta variant hold them back.

Supply-chain disruptions, however, appear to be spreading beyond the auto industry, and they could weigh on consumer spending later this year.

“The shipping bottlenecks will become more of an issue in November and December when you have that spike in holiday-related sales,” said Ms. Markowska.

On Wednesday, the Biden administration said the Port of Los Angeles—one of the country’s busiest—would operate 24 hours a day as it struggles with backlogs that have left containers stacked up at the port with dozens of ships waiting offshore.

James Burris, owner of Black Dog Bikes in Staunton, Va., said he regularly has to tell customers looking for a specific item that he can’t get it shipped to the store right away because of problems in the supply chain.

“Not being able to suddenly order one of those higher-end bikes has hurt because we’re missing out on the sale,” he said. The store has a good supply of entry-level bikes, he added, and sales overall have been solid, on par with 2019 levels.

Retail sales surged in March from the prior month as many Americans received $1,400 checks from the government under a Covid-19 rescue package signed by President Biden. Consumer spending has been relatively steady since then, holding well above pre-pandemic levels.

Several rounds of government stimulus mean that households are sitting on roughly $1.6 trillion in savings, representing 9.4% of their disposable income, well above pre-pandemic levels, according to the Commerce Department.

At the same time, private-sector hourly wages were up 4.6% in September over the previous year, according to the Labor Department, reflecting strong demand for labor, though not enough to offset higher inflation during the past year.

Economists expect the boost to spending provided by stimulus payments and more-generous unemployment benefits will start to fade, but many stores are still finding consumers ready to spend.

Zach Gray, manager of Music & Arts, a music store in Greenville S.C., said parents will usually rent instruments for their children to practice on. Now many are buying instruments outright, he said.

“It’s not quite normal for a parent to drop $700 on a saxophone for their sixth-grader who’s unsure they want to continue with it,” he said.

Write to David Harrison at [email protected]